National Savings & Investments (NS&I) has released more details of its Green Savings Bond, originally announced in the spring Budget. The bond will have a fixed term of three years with no early encashment options. It will be open to all investors from age 16 upwards, with a maximum investment of £100,000 and a minimum of £100.
Interest will be added to the bond every year with no tax deducted at source and paid on maturity. However, the interest will be taxable, meaning that investors could face a tax liability each year, but no corresponding income payment.
Frustratingly the one piece of information NS&I did not supply was the interest rate the bond would pay – that “will be available later in the year”. It is unlikely to be a chart-topping figure. NS&I is currently offering just 0.4% for reinvestment on maturing three year Guaranteed Growth Bonds and three year government bonds yield under 0.2%.
The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.